Impact of AI on Money Laundering and Terrorist Financing: Emerging Risks And Policy Responses

Terrorist financing and money laundering remain serious international challenges. These seemingly distinct threats are interlinked and feed off each other, thereby reinforcing the challenge they pose individually. The advent of Artificial Intelligence (AI) is revolutionising every field of human endeavour. Early indicators suggest that terrorist financing and money laundering have also been impacted by it. AI functions as a catalyst. It may not change the counters of the threat, yet, it has the ability to enhance it if suitable measures are not instituted by organisations, countries and the wider international community. This paper briefly describes the characteristics and capability of AI as a technology. It explains the concept of terrorist financing and money laundering to explore the linkage between the two. It analyses case studies of AI’s exploitation by terrorist organisations and criminals and its simultaneous employment by intelligence and law enforcement agencies attempting to remain ahead of the technological curve. Finally, the paper suggests policy options to improve the adoption and implementation of AI to limit the threat from terrorist financing and money laundering.

About the Author

Col Vivek Chadha (Retd), served in the Indian Army for 22 years prior to taking premature retirement to pursue research. He joined the Manohar Parrikar Institute for Defence Studies and Analyses in November 2011 and is a Senior Fellow at the Military Affairs Centre. Colonel Chadha’s areas of research are counter terrorism, military and indigenous studies. He was part of the team that wrote the Indian Army’s first Sub Conventional Doctrine in 2006. His single author books on counter terrorism include Low Intensity Conflicts in India: An Analysis; Lifeblood of Terrorism: Countering Terrorism Finance and Company Commander in Low Intensity Conflicts. His single author books on military subjects include, Even if Ain’t Broke Yet, Do Fix It: Enhancing Effectiveness Through Military Change; Kargil: Past Perfect: Future Uncertain; CDS and Beyond: Integration of the Indian Armed Forces and Mahabharata’s Strategic Insights: Navigating the Dharmic Compass.

His current area of research focusses on the strategic lessons of the Mahabharata. He is the Managing Editor of the Journal of Defence Studies.